Does Companies House have to get 20% of assets when winding up a Company?

[Busby15]

Due to the death of my brother ,the family business needs to be wound up and assets sold, which is basically the land. The Company hasn’t traded for over 4 years but annual accounts have been sent to Company house. Is it correct that Company House will get 20% of the assets? Is there any legal way round this? The sale of the land was basically going to be my families pension, why does Company house expected to get such a large amount?

[Mamyalynne]

May be some info here

http://www.companiesh...indingUpCompany.shtml

[factor-fiction]

Might be worth reading this.
http://www.detini.gov...ng-up-own-company.htm
There seems to be no mention there of such a fee, but maybe some sort of bond has been placed with them. I don't know much about this area so we need someone like buildersmate to come on, or you need legal advice.

[rojash]

"Is it correct that Company House will get 20% of the assets?"
Nope. Where did you get that idea?

[themas]

Busby

Please say where you got this idea from. If a company is solvent & is wound up the final accounts go to Co. House & that's it, so far as I am aware. Are you confusing it with any liability for corporation tax?

[chrissa1]

I've never heard of this either Bushby15.

[buildersmate]

As per the others, I suspect you are confusing this issue with either corporation tax liability or inheritance tax liability (on your brother's estate).

Firstly, the company is liable to pay unpaid corporation tax on any PROFITS for any years not covered by annual accounts. The small business CT rate is 20% - a bit of a coincidence that it's the same figure you mention.

But this is nought to do with assets in the business, which are owned by the shareholder(s). If the sole shareholder was your brother, then the assets of the business once liqidated go back to the estate of your brother, and may increase the liability to inheritance tax (IHT) on his personal estate (subject to nil rate band allowance being used up, etc). But the rate of IHT on the amount less allowances is 40%, not 20%.

So please explain what you mean, and who the shareholders are of this 'family business'.

[Busby15]

The major share holder is my Mother 70% my dead brother20% + 10% my other brother. The accountant told my mother about having to pay 20% to someone for winding up the Company. He also said something about the Crown getting it all! We were quite worried by this and wanted some sound advice. If we get 100k for selling the land how much will we actually be allowed to keep?and who gets what?

[factor-fiction]

I suggest you go back to your accountant and ask him to clarify things. There is no 20% fee. There is corporation tax and there are some winding up fees as set out in the pages we attached. I think there has just been a misunderstanding.

[buildersmate]

Agreed. Your accountant doesn't seem to know what he is talking about.

If the business is compulsorily wound-up the Official Receiver gets involved and there is some material on costs here
http://www.bis.gov.uk...company-liquidation#4

The costs run to a couple of thousand plus lawyers fees. But this only applies when a company is liquidated due to a court order and the directors won't or can't do it.

Even if your deceased brother was the only director (unlikely), the shareholders have to power to pass a resolution to appoint another director to wind-up the business.

[Skyline D]

I think it's far more likely that Busby didn't understand what the accountant said than that he doesn't know what he's talking about. Presuming he's a properly qualified accountant and not some lay person off the street claiming the term anyway.